SAA resurrection plan

3 years ago 1

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South African Airways’ interim board chairperson Derek Hanekom says seven aircraft are not enough to help turn the airline around, the Sunday Times reports.

His plan to resurrect the state-owned company involves adding more routes within Africa and leasing more aircraft.

“We can’t do it with the current seven aircraft,” the Sunday Times quoted Hanekom as saying.

However, he did not elaborate on the routes that will be added to the airline’s operations. The airline currently flies two domestic routes and ten routes to African countries.

Public enterprises minister Pravin Gordhan announced the appointment of Hanekom as chair of the airline’s interim board last week.

He takes the helm at an interesting time for South African Airways (SAA), as the board will only remain in place until the Takatso Consortium takes a 51% stake in the airline.

The strategic equity partner is expected to inject R3 billion into the company. However, the deal is subject to tackling the issue of the airline’s debt, which initially sat at R13.5 billion.

This was before budget minister Enoch Godongwana announced a R1 billion bailout allocation for SAA during his budget speech in February 2023.

Hanekom is adamant that the airline can significantly improve its finances before Takatso takes over.

He said Takatso was not “going to find itself coming in with a historical debt, it won’t be like that”.

“We don’t want to place an unnecessary burden on the Treasury … As SAA moves ahead we don’t expect any bailouts, and we are going to work hard to do the best we can to ensure that SAA will look after itself.”

Gordhan appointed the interim SAA board on 18 April 2023, with Hanekom joined by John Lamola, who remains interim non-executive director and will continue as interim chief executive officer.

Gordhan said the board’s appointment emphasises government’s commitment to the success and stability of the airline.

“Their exceptional experience and expertise will guide the airline toward a prosperous future in collaboration with the Takatso Consortium,” he said.

“We recognise the challenges SAA has faced in the past and the importance of learning from those experiences to ensure the airline’s future success.”

In May 2022, it was revealed that the Takatso Consortium bought a 51% stake in SAA for R51.

The deal faced scrutiny from National Treasury and Toto Investment Holdings, with the latter filing documents at the Cape Town High Court to sue government over the deal.

Toto Investment Holdings wanted the sale of the stake in the carrier scrapped and re-run due to a lack of transparency.

According to the filings, Toto founder Bongani Gigaba described the transaction as being “shrouded in secrecy” and “not fair, equitable, competitive or cost-effective”.

The Cape Town High Court dismissed with costs Toto Investment Holdings’ application to halt the transaction, SANews reports.

The Department of Public Enterprises welcomed the decision.

“Toto Investments wanted to interdict the implementation of the transaction for the introduction of a strategic equity partner in SAA, pending the finalisation of the review application,” it said.

“But the court dismissed the application with costs, including the costs of two counsels.”

Toto also launched an application to have the sale to Takatso Consortium’s parent company, Harith, set aside.